A number of senior officials of the Guyana Sugar Corporation (GuySuCo) have been axed in the restructuring process.
GuySuCo has also been ordered to freeze all hiring and to not renew any employees’ contracts that are expiring.
Over the weekend, the state-controlled National Industrial and Commercial Investments Limited (NICIL) disclosed that the life of the board of GuySuCo came to an end on February 14.
NICIL’s Board of Directors, in a special meeting, made the decision to install a new GuySuCo board.
Since the beginning of the year, NICIL has been given control of the sugar corporation with the shares transferred.
NICIL explained that the shares in GuySuCo were recently vested in NICIL by an order signed by Finance Minister, Winston Jordan.
“The NICIL board also instructed GuySuCo to freeze all hiring and to not renew any employee contracts that are expiring at this time. NICIL has begun working with the management deal at the corporation to implement management changes, some of these changes are already being implemented and more are expected to follow in the coming weeks.”
In the shakeup, the portfolio of Chief Executive Officer (ag) was reduced. He is no longer in charge of finance. Rather, the handling of GuySuCo’s finance has been delegated to another official, Kaieteur News was told.
While NICIL will be handling the running of a three-estate GuySuCo, it has a special department – the Special Purposes Unit (SPU) to handle the privatization and divestment of four estates which were closed in the last 15 months.
The four estates under SPU are Skeldon, Rose Hall, Enmore and Wales.
GuySuCo, via the directions of NICIL, will be handling the operations of Albion, Blairmont and Uitvlugt.
With signs last week that the previous GuySuCo’s board was getting ready to hold a meeting this week on a number of issues, both the SPU and NICIL on Sunday made it clear that SPU is leading the charge.
Speaking after a recent meeting between the two teams, SPU Head, Colvin Heath-London said, “the one thing that is paramount right now is that we work together. We must work together to ensure that we get the best deal from the process the estates put up for privatization, and that GuySuCo is successful in turning a profit with the estates it has retained.”
Bhim said that “the objective behind the closure of some estates was to make them available for privatization and ensure that GuySuCo becomes profitable. The best way to achieve that today is for GuySuCo management and the SPU team to work together for the greater good.”
Another area of immediate collaboration between the two teams is the restarting of the Enmore Estate. GuySuCo management closed this estate as part of their plan to downsize the corporation. However, the SPU is concerned that there is cultivated cane in the Enmore Estate fields that need to be harvested and processed, since it represents significant revenue potential.
It is said that almost 30,000 tonnes of cane is on the ground at Enmore estate.
“While the SPU will provide the management for the restarted estate, GuySuCo will provide the technical support. In addition, Demerara Distillers Limited (DDL) had voiced concern over the anticipated shortfall in molasses and its impact on their production and global market commitments. The SPU and DDL have been exploring the possibility of DDL investing in the current crops in the fields at Enmore through advance payments on molasses supply, and also participating in the management of the estate to keep it as a going concern.”
According to a joint NICIL/SPU statement, PricewaterhouseCoopers (PwC), the international financial services provider working on the valuation of the GuySuCo assets now under the control of the SPU for privatization, is concerned that in order to attract the best investors and secure the highest price for the estates, they need to be seen as fully functioning operations and facilities.
“Closed estates will not be attractive to potential investors. The deal with DDL, if approved by the boards of DDL and NICIL, would allow the SPU to meet the PwC recommendations for a quality privatization of the estate.”
It was also noted that the second major area of collaboration is the securing of funding for GuySuCo’s current and short-term operations.
“As indicated by Finance Minister Winston Jordan recently, the SPU is seeking to secure loans, investments and other financial arrangement to support GuySuCo. NICIL-SPU has the responsibility for securing new capital for GuySuCo’s operations.”
The funding being sought by the SPU to support GuySuCo is $30B to cover a four-year period, it was disclosed Sunday.
“These funds will provide a much needed capital injection, support infrastructure maintenance and upgrades at Albion, Blairmont, and Uitvlugt, and develop new co-generation capacity to support estate operations and sell to the national grid. The SPU is confident in its business case for GuySuCo and expects positive results with respect to securing funding for the sugar operation.”
GuySuCo at the end of 2016 was racking up major losses, with at the end of 2017, some $32B being plugged into the corporation by the Coalition Government.
At the end of 2016, the century-old Wales estate was the first to go. At the end of last year, it was Skeldon, Rose Hall and Enmore. About 5,000 workers were sent home. A number of them are being rehired for the restarting of Enmore estate in a few weeks’ time.
The administration has made it clear that it cannot allow GuySuCo to be a drag on the rest of the economy.
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